Communal Property Associations Amendment Bill: deliberations; with Minister

Meeting report

The Chairperson said the purpose of the meeting was to continue with the clause by clause reading and deliberation of the Amendment Bill. She confirmed that Members that had the report of the meeting which was held on 14 February. She led the Portfolio Committee (PC) through the minutes page by page, and these were adopted with a small correction.

The Chairperson requested that Members start reading from page 8 of the Amendment Bill, which was where they had stopped at the previous meeting.

Clause 9

 

Mr A Madella (ANC) read Clause 9 and Clause 10 aloud.

 

The Chairperson requested that members should make comments on Clause 9 (a), 9(b), 9 (c) and 9 (d).

Mr M Filtane (UDM) commented that 9 (a)(ii) stated that ‘any decision to amend the constitution or dissolve the association, or to dispose of or to encumber the property requires an inclusive decision-making process’. He said the use of ‘inclusive’ did not signify the 60% requirement; hence other people who were outside the 60% may take advantage of the word as a request to be included. Also, there was no specification of the period within which cash received had to be deposited in the bank. There was a need to specify time, because people could not be held liable for holding the association’s money indefinitely if there was no such specification. Also, the Committee must be obligated to notify the Registrar of any amendment to its constitution, so that the Registrar is able to carry out its oversight duties over the association.

Mr T Walters (DA) said it is important to lay down a minimum quorum for the amendment of the constitution; the CPA constitution or its amendment should be made available to the Registrar. The PC must also be careful of overloading the system with too much bureaucracy. He suggested that it should be included under Clause 9 (d) (ii) that the executives give a report of its financial standing to the association, and not only to the Registrar.

Mr A Madella (ANC) said Clause 9 (d) specified that all cash of the community shall be deposited. Since community referred to all, it might also imply that their personal money should be deposited.

Ms T Mbabama (DA) suggested that ‘Community’ in Clause 9 (d) (iii), as indicated by Mr Madella, should be replaced with ‘Association’.

Chairperson said the issue of community and association had been addressed several times in the proceedings. It was agreed that ‘Association’ would be used in place of ‘Community’. She invited the Parliamentary legal adviser to throw more light on the issue of ‘inclusive,’ as raised by Mr Filtane .

Mr Nathi Mjenxane, Parliament legal adviser, said the PC had earlier decided to replace ‘Community’ with ‘Association’. The word ‘Inclusive’ was used in the Principal Act and was used to indicate a democratic participatory act, but could be changed if the PC decided to change it.

Mr Filtane said given the extent of concern over poor administration reported during the public hearings and the fact that the purpose of the amendment was to attempt to close all loopholes in the Principal Act, tighter wording should replace loose and ambiguous words. He said ‘inclusive’ was subject to various interpretations.

Mr Madella said the Principal Act did not include the 60% requirement, and there was a need to be consistent in choosing words that went with the changes made to the Act.

Mr P Mnguni (ANC) supported the proposal of Mr Madella, and said ‘inclusive’ should be linked to the section where the 60% majority requirement was defined.

Mr Mjenxane said the amendment in Clause 9 was the amendment to the Principal Act. The principle of inclusivity could be put into the constitution and not into the Bill, because the Bill was all about the principle of inclusivity.

Mr Mnguni said the 60% majority requirement had been discussed, and it had been agreed that it should be included in the Bill, so he preferred that ‘inclusivity’ should be defined in the Bill.

The Chairperson said that the word ‘Inclusive’ could be aligned to Clause 13 (3) (b), which stipulated ‘at least 60% of the members present or represented at the meeting’.

The Chairperson asked if Members agreed that the Clause that explained the 60% requirement should be linked to the Clause in 9 (a) (ii).

Dr Tshilo Manenzhe, Content Adviser, said the concern of Members had been addressed in Clause 12 (1) (a), and the people included had been defined there.

Mr Mnguni said the word ‘Inclusive’ was generous and could be used by prospective fraudsters, and requested that it should be tightened up by including ‘as envisaged in Clause 13 (3) (b)’

The Chairperson said Members had reached a consensus that ‘inclusive’ should be linked with Clause 13 (3) (b).

Mr E Nchabeleng (ANC) said if inclusivity was not well defined, it could bring about a problem in the future. He said the use of ‘Household’ could bring about inequality, because some households were larger than others, and it should rather be ‘Families’.

Mr Filtane said there was a need to agree on who should constitute a quorum -- the household or the family. He urged that the Minister should be briefed on the decisions of the Committee so that the decision reached would be that which could be implemented by the Minister.

Mr Mnguni said Mr Nchabeleng was retrogressing because the issue of had been deliberated in previous meetings. The PC had discussed ‘family’ and ‘households’ during previous meetings. He suggested the PC should progress with the discussion.

The Chairperson told the Minister to make clarification by specifying the people who would constitute the 60% majority, and asked if the word ‘Community’ used in the Bill referred to the ‘Association’. Confusion over the use of ‘community’ and ‘association’ had been raised several times during the public hearing. She requested clarity on ‘association’ and ‘community’

Mr Gugile Nkwinti, Minister of Rural Development and Land Reform, said each CPA was distinguished by its name. The community was defined as members of the specific CPA. The community was named after the people who owned the properties, and the 60% majority was directly related to those registered in the CPA as co-owners of property. He said households would constitute the 60% majority, and these were households that were registered with the CPA. At least a member of each household must be present at the meeting. He said the association was the name of the community.

Mr Nchabeleng said all the issues raised should be simplified by recommending that the land should be nationalized, and the state should consider how it should be shared.

Mr Mnguni expressed concern that the Minister had not been briefed on earlier discussions on the community. The understanding of the Committee was that ‘community’ and ‘association’ were used interchangeably, and it should be referred to as an Association. He said the ‘household’ must be individual members coming from households.

The Minister said there was no variation between the Department and the way in which the PC understood the meaning of association. Only the members who were beneficiaries consisted of the community.

The Chairperson requested that Members should proceed.

Mr Filtane said he had raised a concern about lack of stipulated time for money to be deposited in the bank in Clause 9 (d) (iii). It may be defined in the regulations.

The Chairperson said there should be a specified time within which the money should be deposited in the bank.

Mr Mnguni proposed 48 hours. He expressed concern about the 14 days’ deadline for submitting the bank account to the Registrar proposed in Clause 9 (d) (cc). A CPA might adhere to all the provisions and default by not adhering to the 14 days’ stipulated time of submitting the bank account to the Registrar and in that case, the offence should not be criminalised. There must be a formulation that should encourage people to submit the bank account on time so that it would not have serious consequences on defaulters.

The Chairperson said the 48 hours proposed for depositing money should be included in the regulations.

Mr Filtane said Mr Mnguni had not proposed any solution to the problem identified. He proposed that the ‘14 days’ stipulated should be changed to ‘within a reasonable time.’

The Chairperson said Members should remain consistent in their proposals. The PC should not propose changing a definite time frame to an indefinite one, because it was not consistent with previous proposals for specific time frame. It should not be difficult to provide proof that an account had been opened which could be sent to the Registrar by mail. She said 14days was generous for the task.

Mr Mnguni accepted that the 14 days in Clause 9 (d) (cc) should be left as it was.

Dr Manenzhe said it was stated in Clause 9 (e) (vi) that ‘Members of the association and Committee Members shall have fiduciary responsibilities in relation to the Community and its members’. He asked for clarification on why the Community members should have a fiduciary responsibility towards themselves.

Mr Mjenxane said the confusion was as a consequence of the changes made to the definition of words. For example, members of the Association had been changed to executives. He said the fiduciary responsibility lay with the executives.

Mr Walters was of the opinion that the fiduciary responsibilities should not be accorded to the executives only. They should not be the only ones that were nominated to speak on behalf of members. He asked what would happen in a situation when the executive was dissolved. He suggested that it should cover anyone who took the position if the executives were not available.

Mr Nchabeleng said the submission by Mr Walters would complicate issues. The fiduciary responsibilities should rather be left to the executives, and the members should play an oversight role over the executive.

The Chairperson said there was a proposal to delete the phrase ‘Members of the association’ from Clause 9 (e) (vi), so that it reads: ‘Committee Members shall have fiduciary responsibilities in relation to the Community and its members’

Clause 10

 

Mr Filtane proposed that the phrase ‘in any other manner’ in Clause 10 (3) (d ) should be amended or deleted, because it meant that the legislation would rely on the character of the mediator. He argued that the mediator’s opportunity to explore in any other manner should be limited.

 

The Chairperson asked Mr Filtane to recommend a solution to his submission.

Mr Filtane said he did not have a solution.

Mr Walters said the statement was open ended. He submitted that the mediator should only be able to make a recommendation to the Registrar. He proposed the deletion of the Clause, or the phrase ‘in the reconciliation process’ should be added at the end of the statement, to read ‘in any other manner in the reconciliation process’.

Ms Mbabama said it was not correct to legislate against peoples’ characters, and it was not out of place to make assumptions that people who hold such positions would have an upright character.

Mr Nchabeleng proposed that it should be deleted.

Mr Mjenxane said the recommendation of the mediator was not in itself binding. It could be tied up by specifying that the mediator should attempt to resolve the dispute in an equitable manner.

Mr Walters argued that it was too open ended, and it would be good to specify a limit because the mediator could move beyond the available provisions based on the Clause.

Mr Filtane said he was comfortable with the proposal made by Mr Mjenxane.

The Chairperson requested Members to make a choice between the two proposals. The proposals were the addition of ‘in the reconciliation process’ or ‘in an equitable manner’ at the end of the Clause 10 (3) (d).

Ms Magadla said she was in support of adding ‘in an equitable manner’.

The Chairperson agreed that the phrase ‘in an equitable manner’ would be added to the clause in Clause 10 (3) (d).

Clause 11

.

Mr Nchabeleng read Clause 11, Clause12 and Clause 13

Mr Filtane said the provision in Clause 11 (3) (a) that empowered the Registrar to remove a record or report should be limited. Also, he noted that ‘subpoena’ was mentioned in Clause 11 (4). He said ‘subpoena’ was an administrative process and it should not be criminalised. He asked why the anonymity of a complaint should be allowed, as stated in Clause 11 (8). It would not be possible to proceed with an investigation without disclosure of the identity of the testifier.

The Chairperson asked Mr Filtane what should be done in relation to the subpoena.

Ms Mbabama asked if Mr Filtane’s submission was not covered by Clause 11 (3) (b), which indicated that a subpoena would be used as a matter of last resort. It stated that a subpoena would be used only if the attendance of such persons could not reasonably be procured otherwise.

Mr Filtane said the use of a subpoena was a serious matter.

In response to Mr Filtane’s comment, the Chairperson said the PC was also serious about dealing with the challenges faced by people on account of the CPAs.

Mr Madella said the subpoena was a matter of last resort.

Clause 12

 

Mr Walters commented that Clause 12 (1) (a) specified the need to seek the consent of the Registrar or the Minister, depending on the type of property – whether it was movable or immovable. He asked if a government choice to purchase should be indefinite or time bound. Could permission for a lease be unreasonably withheld by the Registrar? He proposed a time frame during which property owners would not need to seek the consent of the state before they could sell their properties, to avoid the unreasonable withholding of the owners’ power to sell or lease their properties.

Ms Mbabama agreed with Mr Walters submission. She said there should be a time frame between the acquisition of the property and when they could sell without the consent of the State.

The Chairperson reiterated the issues for consideration -- the specification of the time frame before which property owners could sell their properties without seeking the consent of the State, and the power of the Registrar or Director General. She agreed that the issue of the subpoena had been resolved, because it was a matter of last resort.

Mr Mjenxane said the Department should give an explanation on the powers given to the Registrar. There had been deliberations on the right of first refusal at a previous meeting.

Ms Mbabama said the consent of the Registrar could be linked with Mr Walters’ submission on the need to put a time frame that would indicate when they could sell their properties without seeking the consent of the Registrar or the Minister.

Mr Walters said that based on 12 (a), the issue of right of first refusal was linked to government expenses in recovering the land. The clause indicated that any land, regardless of whether the government recovered it or not, would require the right of first refusal. It could be an unreasonable encumbrance in the future. The land belonged to the people and they should be allowed to own it.

Advocate Selo Ramasala, Head of the Department’s Legal Unit, said the right of first refusal was a policy of the Department, and it would not put a time frame to it, although it could agree that movable properties could be sold without the consent of the Registrar

Mr Walters said his concern was the assumption that the issue of first refusal applied to land for which money from the government had been spent in its recovery.

Mr Mnguni said if the principle of right of first refusal was not implemented, people would sell off their lands soon after acquiring them. The right helped the state to buy back the land so that it could be redistributed. There had been several deliberations on this issue.

Mr Filtane suggested that it could be included that the land could be sold, provided it had not been used productively for the purpose for which it had been provided. He asked that it should also be specified where the money collected from the State went after the sale of a property. It would be important to legislate on how the money should be disbursed and distributed among members.

Mr Walters said there was a need to reconsider that as much as the CPAs should not be subject to people who would grab the lands from them, they must also be protected from government inadequacies. He agreed with Mr Filtane’s submission, which proposed that land could be sold if it had not been productively used for specific period.

Mr Mjenxane said the requirement for consent instead of consultation was in order, but the legal team would seek guidance from the PC on the choice between ‘consent’ and ‘consultation.’

Clause 12

 

Mr Filtane suggested it would be better to replace the word ‘assist’ in Clause 12 (4) with the phrase, ‘may intervene to establish the validity or otherwise’. The use of ‘assist’ suggested that the Registrar would take sides by believing the report. The consent of the Minister was alright, but the consent of the Registrar was not necessary. The Registrar should be left to do the administrative work.

 

The Chairperson asked if ‘consent’ should be changed to ‘consultation.’

Adv Ramasala said the assumption that the Minister’s consent should be sought for lands that the government had helped to recover and for which they had expended money, could be stated. Clause 11 (8) was aimed at protecting committee members against strong committee members or executives. Clause 12 (4) stated that a member could request the Registrar because he/she may not have the power to challenge the committee member, hence the need for anonymity in Clause 11 (8).

Mr Filtane said the consent should be sought from the Minister and not the Registrar, because the Registrar was bound to be compromised if given so much power.

Ms Mbabama said she would prefer that the people who were empowered were not policed. They should be allowed to sell their properties if they were not used for the purpose for which it had been intended. She submitted that times change and people could become interested in businesses that seemed more viable to them, and the clause should not restrain them from making such a progression.

Mr Walters proposed how to construct the sentence in Clause 12 (1) (a) to indicate that only property recovered using money from the state would require the Minister’s consent when beneficiaries desired to sell the properties.

Mr Mnguni said he was persuaded that if the right of first refusal was applied selectively, it would lose its weight. The avoidance of the right of first refusal to the state would bring about an eventual close down of the Department. The right of first refusal was a soft issue and should be encouraged. He submitted that it should be left as it was written.

The Chairperson said there was a proposal to use ‘intervene’ instead of ‘assist’, and asked if Members agreed. They agreed to the proposal.

The Chairperson said on immovable property, consent had to be obtained from the Minister, and consent had to be sought from the Registrar for movable properties only if State had assisted financially. Also, there was a proposal to change ‘consent’ in these two statements to ‘consultation’. She requested Members’ opinions on the proposals.

Ms Mbabama agreed that movable properties should be sold with consent from the Registrar, and submitted that a time frame should be added which should indicate the time after which the properties could be sold without consent.

Mr Walters said there was need to strike a balance between allowing the land to be grabbed by the rich, and the continuous possession of the land by the state. Research showed that the state was a part of the land problems in South Africa.

Mr Mnguni said that if need be, land should be nationalised. A way to be objective was to consider the expropriation of land without compensation. There was a need for him to meet with Mr Walters outside the meeting. The land had been taken from their rightful owners through inhumane means, and it would not be fair to allow a reversal of the efforts of the government to restore the land to the rightful owners through the permission to sell at will.

Mr Walters said though there was a fair debate, it would not be right to write legislation because of envisaged changes in the constitution.

Mr Madella said he agreed that further deliberation on the subject by Mr Mnguni and Mr Walters should continue outside the meeting.

The Chairperson said the deliberations would continue at the next meeting.

The meeting was adjourned.